Complaint: Reloadable debit card isn’t a gift card: Green Dot Corp.

There must be an easier way to give money as a gift

The Situation

I did a not-so-random-act of kindness at a nursing home. Days later, to show its appreciation, the home gave me a gift. Specifically a “reloadable prepaid Visa card” from Green Dot Corporation (Monrovia, CA). The home’s intentions were good, but my experience with this card was not.

In my complaint to Green Dot’s CEO, I wrote “ opaque and onerous on-line activation process. I was ‘spitting bullets’ well before the end of that process... It wasn’t till I had entered lots of personal information across several webpage screens that I finally found out the value of this gift card. Then and only then was I given the option to apply for a refund. I had to enter yet again personal information on a webpage entitled ‘refund.’ After entering a not-very-complementary comment in the space provided [regarding why I was requesting the refund], I clicked on the ‘submit’ button and got a response that essentially told me to start all over again.”

My letter hastened, if not actually activated, a refund. A second letter got me talking to the CEO of Green Dot. It was a learning experience for me. And I hope for Green Dot.

Background and Commentary

This reloadable debit card comes in a compact package not much larger than the card itself. But it is a lot thicker.

This reloadable debit card comes in a compact package not much larger than the card itself. But it is a lot thicker.

Cash is so crass. Restaurant gift certificates require knowing what restaurants a person likes, and then actually buying the certificate. Store gift cards are good, if you know what stores a person shops. The modern, high-tech way of giving monetary gifts is to pop over to a local gas station or quick-mart and buy a gift card.

Alas, what looks like a gift card might not be.

For $4.95, the Green Dot “general-purpose reloadable cards”—that’s what the industry calls them—is “loaded” with an initial monetary value (selected at time of purchase; cash payment only). The “reload” means the card’s value can be increased. As printed on the packaging, “Pay as you go! No overdraft fees. No penalty charges. No long term commitments.” “No Credit Check. No Bank Account Required.” “Use it Everywhere Visa debit cards are accepted.” Fees? Yes: “$5.95 per month—OR—Pay No Monthly Charge in any month that you make 30 purchases or more.”

One problem. While it looks like a gift card, it’s not a very good substitute for one. Ignoring the environmental aspects of yet-another-piece-of-plastic that has to be thrown away (see Staple’s environmental commitment), the card must be activated (online or by phone). And “You’ll need to provide your Social Security Number and other information.”

What kind of gift requires handing over your social security number (SSN)?

Actually, that does make sense—depending on the monetary value loaded into the card or if one is using the card repeatably like a debit card. As Steve Streit, CEO of Green Dot, explained, “The bad guys will buy [this card]. It’s a way to launder money.”

Steps Taken

I’ve not had one of these cards before. I had no idea what to expect. Nor did I know how much the nursing home put on the card; that is, what the card was worth. So in the 20 minutes between steps in a soup recipe, I figured I’d call the toll-free number to activate the card or initiate a refund for whatever the card was worth.

Realize that I’ve gotten gifts that take some time to set up: building plastic models, building a shortwave radio, reading books, waiting for film to be processed (I know: old tech). But money? This reloadable debit card was truly an exercise in delayed gratification.

The card number is under the peel-off label. Unlike conventional credit cards, the card number is not embossed. So you have to know to peel off the label—as opposed to know by feeling. Live and learn.

The card number is under the peel-off label. Unlike conventional credit cards, the card number is not embossed. So you have to know to peel off the label—as opposed to know by feeling. Live and learn.

I immediately hit a snag. I couldn’t find the card number. It wasn’t printed on the packaging. The number on the back of the card didn’t work. As I was searching for the card number, I was listening to the options on the telephone, hoping for an option to reach a human being. Some things are just plain faster with a living human being, versus punching a telephone keypad, using speech recognition over the phone, or entering data via a webpage.

Nope. No “human being” option, or facsimile thereof. I hung up. For whatever reason, I decided to peel back the peel-off label. Oh. There is the card number. I called the toll-free number again. When requested, I used the keypad to enter the number. The pleasant automated voice over the phone then told me it would ask for various information to confirm my identity. Such as SSN. I hung up for a variety of reasons. I didn’t like the idea of giving out my SSN, especially for a gift. Hearing the pace of the phone instructions, I realized this was going to be a slog. And I really wanted more information about what I was getting myself into. Such as, the value of the card. I decided the online approach would be better for all that. (Plus, I didn’t want the soup I was making to burn.)

I was wrong. Online activation shed no further light about what to expect. The process flow for collecting data was mostly rigid. Where options existed, they were unclear or seemed contradictory.

For instance, in the second screen, my name and birth date is required as noted by the prominent “* Required Information.” Note the asterisk (*). Green Dot then states “A Social Security Number is required to get a reloadable Personalized Card with ATM access.” Next was space to enter the SSN. This was followed by an asterisk and the statement:

A valid Social Security Number is required to receive a Personalized Card. If you do not have a Social Security Number or do not wish to provide it, you can continue with the registration of only your Temporary Card. Your Temporary Card cannot be reloaded and has no PIN or ATM access. You will only be able to spend the funds currently on the Temporary Card. Please note that if you choose this option, you will no longer be able to receive your Personalized Card.

Next, a checkbox to “check here to continue without a Social Security Number and register only the Temporary Card with no Personalized Card option.”

Open sesame and behold: advertising material, disclaimers, instructions, and fees are printed on green paper; the cardholder agreement is printed on a folded piece of white paper; there’s packing material; and then the card itself. (Pencil not included.)

Open sesame and behold: advertising material, disclaimers, instructions, and fees are printed on green paper; the cardholder agreement is printed on a folded piece of white paper; there’s packing material; and then the card itself. (Pencil not included.)

Being a writer, being trained as an engineer, being someone who does his own taxes, being one who over his lifetime so far has filled out one or two hundred forms, and being one who doesn’t take lightly the filling out of application forms and legal documents, I was more than mildly confused by the asterisked “* Required Information” and the “valid Social Security Number is required”—but it really isn’t. I checked to continue without giving my SSN.

Did I mention all I really wanted was to get a refund for whatever the card was worth, which is something else I wanted to know?

Next on that webpage: enter mailing and residential addresses. I often “code” my home address so I can track who’s selling it to junk-mail lists. I added a box number to my address. Actually, a mailing box letter, such as you’d find in apartment buildings, versus the post office, which uses numbers. I entered “Box GD.” Invalid entry. Turns out the online form only accepts “POB” for mailing box, not “Box.” Strange. Next: home phone number. (Not having a cell phone meant I didn’t also have to enter my carrier.) I then smacked “Continue.”

“Enter account information.” This included creating an account log-in; that is, entering my e-mail address, a password, and a “password hint.” Um, why do I need to do all this for a refund? In fact, is this card worth my jumping through these hoops? I skipped entering my email address and entered a password—twice, as required. The password, and hint: “Fuckthis.” My notes are slightly confused at this point. Something was an invalid entry. My notes show I changed the password hint to “a biological impossibility + opp of that.” I then smacked “Continue.” After reading the next webpage, “Confirm account information,” I smacked “Continue” for the next webpage.

Step three: accept/decline the “cardholder agreement.” Sigh. When was this going to end? And I still didn’t know how much the card was worth.

Ten minutes in (not including the time to find MoneyPass ATM locations for “free withdrawals”; incidentally, there are only two locations in the entire state of New Hampshire, both at least an hour away from the state’s largest city), I finally got to a “refund” link. I gladly clicked it.

Thank you for your interest in Green Dot. The card activation has been stopped. A refund will be processed. Please provide the information requested below to receive your refund.

Following that was the ubiquitous “* Required Information.” That information was what I had already entered: name, address, zip, and phone number. “Reason” is also required, but you need not enter a “comment.” I did.

Because going through the hoops in activating this *gift* (card) for me violates my privacy, requires way too much of my time before actually knowing the value of this card, and is both onerous and time consuming. You should know that this card is a gift for my help in hospice work up to one hour before a patient died. Life is short. Real short. This prepaid Visa card, “gift card", GreenDot card, whatever you want to call it, is an outfuckingragous financial scam. Why you couldn’t explain the activation steps beforehand as well as offer a quick link to “refund" just proves how arrogant your whole system and industry is.

I then smacked “Submit” and got the following:

We’re sorry, but there has been a problem with your activation. To start over click here, or to complete your activation by phone please call us at 1-866-785-6963.

How come the web server can recognize swear words, but can’t recognize “Box” for “POB” in a mailing address?

The “cardholder agreement” (right) is printed on white paper measuring 30¼” by 8½”—almost 31½” on the diagonal—in sans serif type and with the usual opaque legal text in bold or IN CAPITAL LETTERS. The agreement covers both sides of the paper.

The “cardholder agreement” (right) is printed on white paper measuring 30¼” by 8½”—almost 31½” on the diagonal—in sans serif type and with the usual opaque legal text in bold or IN CAPITAL LETTERS. The agreement covers both sides of the paper.

My letter to Steve Streit, Green Dot’s CEO, (1) stated my displeasure, (2) directed Green Dot to send me a refund, and (3) informed Green Dot that its website had no OPT-OUT option for marketing lists—why isn’t that not “required information”?—and I did not want my name or address on any such list managed by Green Dot. I sent that letter certified, return receipt.

The first draft of that letter hardly resembled the one I sent Streit. My first draft was long, pointed, and had several recommendations, other than “Ban these types of credit cards.” I edited that letter and addressed it to Congressman Barney Frank, Chairman, House Financial Services Committee, U.S. House of Representatives. Copies went to a bunch of people. Streit of Green Dot, of course; Senator Chris Dodd, Chairman, U.S. Senate Committee on Banking, Housing, and Urban Affairs; and senators and representatives from both New Hampshire (my home state) and California (Green Dot’s home state). Also, Timothy Geithner, Secretary of the Treasury, and to the managing director of the American Bankers Insurance Association—after all, this card is a financial product; they should hear from consumers (and taxpayers). Plus Consumer Reports, which has published several articles about gift cards, bank cards, and the like. (Consumer Reports doesn’t like ’em.)

Last—another 44¢ in postage won’t break my bank—a copy went to The Better Business Bureau, Colton, CA. Here is the BBB summary of my complaint and Green Dot’s response (dated after I got the refund), which notes that it “waived the $19.95 FedEx Delivery Fee” and that “Refunds take two business days to generate.”

The Treasury department forwarded my letter to the Federal Trade Commission (FTC). That’s not as useless as it may seem. Here’ why (FTC letter dated December 29, 2009; FTC Ref. No. 24998244):

...Letters from consumers and businesses are very important to the work of the Commission. They are often the first indication of a problem in the marketplace and may provide the initial evidence to begin an investigation. The Commission does not resolve individual complaints. The Commission can, however, act when it sees a pattern of possible violations developing.

The information you have provided will be recorded in our complaint retention system. This computerized system enables us to identify questionable business practices that are generating numerous complaints and may be in violation of the law.

And both NH senators responded. Senator Shaheen’s response was irrelevant. Senator Gregg’s response acknowledged “these cards require compliance with tedious activation and refund policies and often require cardholders to provide personal information for access.” As for actually doing something about those tedious policies, well... His letter included the usual, vapid political statement of intent: “...I will keep your thoughts in mind as I continue working with my Senate colleagues on policies to protect American consumers.” (Pointing out to the good senator how much he and his Senate colleagues have protected American consumers in the last few years, what with financial deregulations, lack of regulatory oversight, and consequent financial meltdown, would be an entirely different, and long, letter.)


Green Dot responded quickly. A week after my letter to the CEO, “Danny” left a message to call him (at a non-toll-free number). Natch, I got his answering machine when I called back. I told him to keep trying me; I’m not calling non-toll-free numbers. Danny called back soon enough. Basically, he wanted a confirmation of everything I said in my letter, including card number, my address, and a little about my trying to activate the card. He said I would receive the refund by FedEx in seven days. (He was off by over a week.) I received the refund 2½ weeks after trying to activate the card. That’s actually a helluva lot faster than rebates for consumer electronics, computers, groceries, and other purchases.

CEO Streit called me less than a week after I mailed my letter to Congressman Frank. Streit's first comment was, after introducing himself, “The good news is I don’t get letters like this often.” He wanted to hear directly from this customer. This was (blessedly) not a marketing call. Nor was it one (ditto) to justify Green Dot. We talked about this “bank account product.” We both agreed this was the wrong product to use as a simple gift card. Streit mentioned the card’s packaging in the future should make this explicit. We talked about having an option in the online activation process to go directly to the refund page. Streit admitted that “IT works slow.” (I laughed. This is typical across industries.) He also told me that about 12% of these cards wind up being a refund, which “costs us a lot.” That being the case, Green Dot has a very good incentive to market these cards correctly, as well as to simplify refunding so the process doesn’t add costs to the company. Streit told me that Green Dot has a good BBB rating, and wants to keep it that way. One of his last comments was that “writing to a regulator [Congressman Frank] is a good way to get attention.”

All in all, an interesting and informative conversation. However, I’ll probably never know if he implements my recommendations. I don’t plan to buy one of these cards, and I may very well not accept them as gifts.

In late December, I got a letter from the BBB effectively closing the loop, “but we would prefer to hear from you directly.” I sent this response.

“Not a Gift Card”

I stopped by a quck-mart last week to see if they were selling “reloadable prepaid Visa card” from Green Dot. More important, I wanted to see if the product’s packaging had changed to clearly indicate how these cards were to be used. It was. On the “Reloadable Prepaid Student Card,” just above the price and in the same size and font as the price, were the words “Not a Gift Card.” The “Reloadable Express Bill Pay Card,” did not have such a label. This makes sense; according to the Green Dot website, the bill-pay card is for—as the product’s name implies—paying bills online or by phone. While someone might give you one of these cards as a gift to pay off your bills, you can apply this card only to bills. And as we all know, bills are not gifts. The quick-mart did not have reloadable, prepaid Visa or MasterCard debit cards for sale, so I don’t know if these products are labeled “Not a Gift Card” as well. I’ll keep checking.

1/31/11 Yup, the reloadable “prepaid Visa “ product from Greendot now mentions “Not a Gift Card” in small print above the price of the product.

Opting out options—Not!

Got an email two days ago out of the blue:

From: "JayC"
Date: Mon, 25 Nov 2013 08:50:11
Subj: Green dot

Opting out of providing ssn/bday is no longer an option.

Thanks for your interesting blog post and your diligence in holding them accountable.

MN speaks out

MN had a problem refunding her prepaid Green Dot card. Quite simply, she didn’t want to give the company lots of personal information, especially her Social Security number. She emailed me about her communications with Green Dot—and what eventually happened. (Spoiler alert: She got the refund.)

“...unless you're a NASCAR fan.”

I am so glad I’m not the only one who pokeys along through life, trying to do my best, being fair and intelligent in all my dealings, applying what I’ve learned about computers and corporations and privacy and security, and often finding myself coming to a screeching halt with, as FT described it, a “Huh?” feeling.

FT’s daughter got a Green Dot card as a gift, and was registering it. He also balked at providing a social security number. In FT’s email to me, he included the phone number for Green Dot’s Activation Hotline (1-866-785-6963). A week later, FT got the refund from Green Dot (plus the card’s purchase price), but he was also curious. “I then began to wonder whether 1-866-785-6963 was a closely-guarded customer service number,” he wrote. “Not so secret, but not so obvious, either, maybe unless you’re a NASCAR fan.”

Because NASCAR doesn’t race Prius cars, I would never have found the phone number either.

The Call to Action

As more transactions go online, all industries—not just financial—need to pay attention to their web-based operations, including user interfaces, security requirements, disclaimers, and transaction processes. Will my one letter “activate” Green Dot to do that? Will my one letter “activate” Congress to ensure financial institutions (and other business enterprises) do the “right thing” for customers: implement customer-friendly user interfaces and process flows in their online/telephone activation processes. Your help is requested in activating that change.

Update5 New12/5/18
Green Dot customers write in—about getting the full amount of their card

The third one tipped the scales, even though I told “GS,” the first Green Dot customer to write me, that I would post his email on my website “soon.” Now almost two years and two months later (December 5, 2018), here are emails from other people trying to retrieve cash from their Green Dot prepaid credit cards. These are in the order received with, if applicable, my response(s):